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LUGA VS. ARCIAGA (2011) Facts: The case involves a 911 sq. m. parcel of land in Davao City.

The property was initially owned by Y. Furukawa Daliao Plantation before being turned over to the Philippine government, pursuant to which the land came under the administration of the National Abaca and Other Fibers Corporation (NAFCO), and later by the Board of Liquidators (BOL). In 1957, Loreto Luga (Luga), a former tenant of NAFCO and after that of BOL, occupied the parcel of land and built a house of light materials thereon. However, in 1960, a certain Honorio Romero (Romero), an employee of NAFCO, executed an Occupants Affidavit over a 2.5 hectare property in the same area, including the lot Luga was occupying. Romero later sold the land to Elena Arciaga (Arciaga), who, in 1988, upon a favorable indorsement by the BOL to the Registry of Deeds, was able to register a Transfer Certificate of Title (TCT) over the property in her name. Upon learning about Arciagas title, Luga filed a complaint for reconveyance of title. Arciaga countered this by saying that Lugas occupation of the property was only through the mere tolerance of their predecessor-in-interest. The RTC ruled in favor or Luga, reasoning that Arciaga obtained title through fraud and falsification of document with the BOL. The Court of Appeals reversed the RTC, holding that Luga did not occupy the land in the concept of an owner but was merely allowed to stay there by Romero. Issue: Whether or not Luga occupied the land in the concept of an owner. Held: No, he did not occupy the property in the concept of an owner. Ratio: The disposition of the land in litigation is governed by Republic Act No. 477, as amended, which provides that such lands of the public domain, except commercial and industrial lots, shall be sold by the BOL to persons who are qualified to acquire public lands, giving preference first to bona fide occupants thereof on or before 12 December 1946 but not later than 31 October 1960 and who shall be limited to the area they have actually and continuously improved and maintained. Luga failed to prove that he was a bona fide occupant of the land in litigation. Despite his testimony and that elicited from his witnesses to the effect that he occupied the subject parcel in 1957, Lugas documentary evidence consisting of receipts issued by the NAFCO and BOL simply showed that he was a tenant on the plantation from 1955 to 1957, remitting a portion of the produce harvested therefrom to said government agencies. On cross-examination, Loreto also admitted that he did not file any application for the land and/or declare the same for taxation purposes because he knew that he was not the owner thereof. Since possession may be exercised in one's own name or in that of another and it is not necessary for the owner or holder of the thing to personally exercise his possessory rights, Loretos tolerated occupancy of the land cannot be said to have ousted the possession claimed by Arciaga.